Entrepreneurs commonly encounter problems with local municipalities regarding advertising tax. Local municipalities usually wish to levy advertising tax on any information that entrepreneurs present at or near their place of business. Among other things the tax is levied on signs with neutral information that does not advertise anything or anybody.
Under paragraph section 2 subsection 2 of the Estonian Advertising Act, the following is not considered to be an advertisement – marking a location of business or professional activities with its name, type, times of sale of goods or provision of services, the name of the person, the trade mark and the domain name on a building where the location of a business or professional activities is situated and at the entrance to the location of business or professional activities. Many issues arise from this provision – mainly, what can be seen as a “type of business” that can be presented without tax. Additionally, it is debatable when such information is “at the entrance to the location of business or professional activities”. The Advertising Act and decrees of local municipalities also foresee other exemptions that could apply.
Before paying advertising tax it would be wise to think through and discuss with a specialist whether information presented is an advertisement or whether a reason exists to contest the findings of the local municipality.